Mortgage-backed securities (MBS) are fixed-income investments formed by pooling home loans and selling shares of that pool to investors. When homeowners make monthly mortgage payments, both the interest and principal are passed through to the MBS holder. For individual investors in 2026, the market offers a way to earn passive monthly income with generally higher yields than U.S. Treasuries, though with unique risks like prepayment. Core Investment Benefits
: Complex structures divided into "tranches" with varying risk levels, maturities, and payment priorities. 2026 Market Outlook buy mortgage backed securities
Funds like the iShares MBS ETF (MBB) provide diversified exposure to thousands of mortgages. Best for retail investors. buy mortgage backed securities